News
Fitch downgrades ten Lankan banks to Rating Watch Negative
Fitch Ratings on Thursday downgraded the National Long Term Ratings of 10 Sri Lankan banks following the recent sovereign downgrade and recalibration of the agency’s Sri Lankan national rating scale.Given below is the press release in full: “The recalibration is to reflect changes in the relative creditworthiness among Sri Lankan issuers following Fitch’s downgrade of Sri Lanka’s Long-Term Local Currency Issuer Default Rating (IDR) to ‘CC’ from ‘CCC’/Under Criteria Observation on 1 December 2022. Fitch typically does not assign Outlooks or apply modifiers to sovereigns with a rating of ‘CCC+’ or below.
“National scale ratings are a risk ranking of issuers in a particular market designed to help local investors differentiate risk. Sri Lanka’s national scale ratings are denoted by the unique identifier ‘(lka)’. Fitch adds this identifier to reflect the unique nature of the Sri Lankan national scale. National scales are not comparable with Fitch’s international rating scales or with other countries’ national rating scales. For details, see Fitch Ratings Recalibrates Sri Lanka’s National Rating Scale, dated 19 December 2022.
“The National Ratings of the Sri Lankan banks consider their creditworthiness relative to other issuers in the country. The recalibration of the Sri Lankan National Rating scale has resulted in downgrades of the National Long-Term Ratings of the following banks:
“Bank of Ceylon (BOC) to ‘A(lka)’/Rating Watch Negative (RWN) from ‘AA-(lka)’/RWN, People’s Bank (Sri Lanka) (PB) to ‘A(lka)’/RWN from ‘AA-(lka)’/RWN, Commercial Bank of Ceylon PLC (CB) to ‘A(lka)’/RWN from ‘AA-(lka)’/RWN, Hatton National Bank PLC (HNB) to ‘A(lka)’/RWN from ‘AA-(lka)’/RWN, Sampath Bank PLC (Sampath) to ‘A(lka)’/RWN from ‘AA-(lka)’/RWN, Cargills Bank Limited (CBL) to ‘A(lka)’/RWN from ‘A+(lka)’/RWN, DFCC Bank PLC (DFCC) to ‘A-(lka)’/RWN from ‘A+(lka)’/RWN, National Development Bank PLC (NDB) to ‘A-(lka)’/RWN from ‘A(lka)’/RWN, Seylan Bank PLC (Seylan) to ‘A-(lka)’/RWN from ‘A(lka)’/RWN, Nations Trust Bank PLC (NTB) to ‘A-(lka)’/RWN from ‘A(lka)’/RWN.
“The downgrades of the National Ratings of the 10 banks are driven by the downgrade of the sovereign’s Long-Term Local-Currency IDR and the recalibration of the national rating scale while also reflecting the relative creditworthiness among Sri Lankan issuers.
“A probable default on the sovereign’s local-currency obligations increases the risk that authorities will impose restrictions on banks servicing their local-currency obligations. That said, we believe this risk is lower than non-payment by the sovereign.
“The downgrade of CBL’s rating incorporates the additional consideration of parent CT Holdings PLC’s (CTH) limited ability to provide extraordinary support. This is reflected in CBL’s large size relative to the group and the bank’s weak stand alone credit profile.
We have maintained the national ratings on RWN to reflect the potential for these banks’ credit worthiness relative to other entities on the Sri Lankan national ratings scale to further deteriorate amid the likelihood of capital and funding stress as the default risk on domestic debt increases while access to foreign-currency funding remains constrained. The Rating Watch Negative (RWN) on CBL’s rating reflects our view that CBL is not immune to these system wide stresses despite parental support.”
News
Prison mayhem leaves at least 26 dead; five officers killed in revenge violence
At least 26 people, including five prison officers and 20 inmates, have been confirmed dead following violent unrest at Negombo Prison, hospital sources said yesterday, as authorities struggled to restore full control over the facility.
According to unconfirmed reports the prison officers were killed by rioters yesterday morning, in retaliation, and weapons carried by those officers were grabbed by them.
Negombo General Hospital Director Consultant Dr. Pushpa Gamlath said nearly 100 injured persons had been admitted, following the clashes, and eight of the critically wounded had been transferred to the National Hospital, in Colombo, for further treatment.
The violence, which initially broke out on Sunday (5) between remand prisoners and convicted inmates, left two inmates dead and 38 others injured before being temporarily brought under control.
However, tensions flared again on Monday (6), with prison officials reporting renewed unrest inside the facility despite earlier assurances that the situation had stabilised.
Police said the initial confrontation was triggered by a dispute linked to the exposure of an alleged drug trafficking network, operating within the prison, and was reportedly orchestrated by a drug trafficker, identified as Suresh, who is said to have links to an underworld figure known as ‘Booru Moona’.
The violence rapidly escalated, with female inmates staging a protest on the Prison roof in support of those involved in the clashes, while relatives gathered outside demanding information on detainees. Police later facilitated visits for selected family members to hospitalised inmates.
The Negombo Prison, which houses around 1,800 remand and convicted inmates, descended into widespread disorder as rival groups clashed, with reports indicating that the violence later spread beyond the initial confrontation.
Authorities said rioting inmates had allegedly seized firearms during the renewed unrest on Monday, prompting heightened security measures.
The Sri Lanka Air Force deployed drones for aerial surveillance and a Bell 412 helicopter to monitor the situation, while additional military personnel were sent to reinforce security around the prison.
Prisons Department spokesperson A.C. Gajanayake said a special investigation team had been appointed, under the direction of the Commissioner General of Prisons, to probe the incident, while a separate police investigation is also underway.
Justice Minister Harshana Nanayakkara told The Island that he had called for a detailed report on the disturbances.
By Norman Palihawadane
News
Cleaner, cheaper electricity gathers momentum with rapid progress in 50 MW Mannar wind power project
Sri Lanka’s drive towards cleaner and cheaper electricity gathered fresh momentum with the reported rapid progress in the 50 MW Mannar Wind Power Project, which is expected to produce the lowest-cost wind-generated electricity in the country’s history while saving billions of rupees in annual fuel imports.
The Ministry of Energy announced that the first wind turbine for the project had already arrived in the country, while the remaining turbine components have reached the Port of Trincomalee and are currently being unloaded, signalling a major milestone in the construction of one of the country’s key renewable energy ventures.
The project, inaugurated by President Anura Kumara Dissanayake, in January this year, is expected to become a cornerstone of the government’s strategy to transform Sri Lanka’s electricity sector by expanding renewable energy generation and reducing dependence on imported fossil fuels.
According to the Ministry, electricity generated by the Mannar wind farm will be purchased at USD 0.0465 (approximately Rs. 14.37) per unit, making it the lowest tariff ever secured for wind-generated electricity in Sri Lanka.
Energy experts say the competitive tariff demonstrates the growing economic viability of renewable energy and could help stabilise future electricity prices.
The Ministry also estimates that once the wind farm is connected to the national grid, Sri Lanka will save approximately Rs. 4.7 billion annually by reducing the import of fossil fuels required for thermal power generation, easing pressure on the country’s foreign exchange reserves.
The Mannar project is expected to support the government’s ambition of substantially increasing the contribution of renewable energy to the national electricity mix, by 2030, while helping Sri Lanka move towards its long-term goal of achieving net-zero carbon emissions by 2050.
Hayleys Fentons PLC, selected through an international competitive bidding process, is responsible for the installation and maintenance of the wind turbines.
The National System Operator (NSO), operating under the Ministry of Energy, will oversee the integration and management of electricity generated by the project within the national grid.
By Ifham Nizam
News
Tech-enabled trafficking, fake foreign jobs pose growing threat, MPs told
Human trafficking has become increasingly sophisticated, with deceptive overseas employment offers, fraudulent recruitment practices and technology-enabled recruitment emerging as major threats that require a coordinated national response, Members of Parliament were told at a special awareness programme held in the House recently.
Addressing the programme, Secretary to the Ministry of Defence and Chairman of the National Anti-Human Trafficking Task Force, retired Air Vice Marshal Sampath Thuyacontha, said trafficking in persons had evolved significantly over the years and was now closely linked to organised transnational criminal networks.
He warned that fake foreign employment opportunities, fraudulent recruitment agencies, online recruitment platforms, forced labour, sexual exploitation and, in some instances, the use of victims for forced criminal activities had become key challenges confronting authorities.
The awareness programme organised jointly by the National Anti-Human Trafficking Task Force of the Ministry of Defence and Parliament, was aimed at strengthening legislators’ understanding of emerging trafficking trends, the legal and policy framework governing the issue, and the role of Parliament in strengthening anti-trafficking legislation.
MPs were also briefed on the National Strategic Action Plan on Combating Human Trafficking (2026-2030), which focuses on preventing trafficking, identifying and protecting victims, strengthening the criminal justice response and improving coordination among State institutions.
Special emphasis was placed on the growing use of digital platforms for recruitment, deceptive migration practices, labour exploitation and the coercion of victims into criminal activities.
The programme featured presentations by Additional Solicitor General Haripriya Jayasundara, PC, and State Counsel Sajith Bandara of the Attorney General’s Department.
The event, held under the patronage of Deputy Chairperson of Committees Hemali Weerasekara, was attended by Opposition Leader Sajith Premadasa, Public Security and Parliamentary Affairs Minister Ananda Wijepala, Deputy Defence Minister retired Major General Aruna Jayasekara, Members of Parliament and senior officials of the Ministry of Defence, the National Anti-Human Trafficking Task Force and Parliament.
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